What is expiry thursday?

01:22 Mins Read

Let's understand the concept behind expiry thursday.


"What is expiry thursday? Before we answer this, let's understand what is Expiry date? Every derivative contract be it future or options, which is based on an underlying security such as a stock, commodity, or a currency, has an expiry date. On the expiry date, the derivative contract is finally settled between the buyer and seller. The settlement happens in either of the following ways:
1. delivery: where the seller of the contract delivers the quantity to the buyer, who pays the full price for it.
2. Cash settlement: which means settlement of the difference between the spot price and the derivative price through exchange of money The derivative contract expire on last thursday of every month. The owners can choose to exercise the option, close the position to realise their profit or loss, or let the contract expire worthless. Let's understand more about the basics of stock market on Smart Money by Angel Broking."

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